Showing papers in "International journal of economics and finance in 2012"
TL;DR: In this article, the authors explored whether company age, industry type and company size have a potential influence on levels of Corporate Social Responsibility Disclosure (CSRD) in the annual reports of Libyan companies.
Abstract: This paper explores whether company age, industry type and company size have a potential influence on levels of Corporate Social Responsibility Disclosure (CSRD) in the annual reports of Libyan companies. In this study quantitative and qualitative methods were used to collect data to determine the level CSRD in Libyan firms. Hypotheses are tested using regression analysis on a sample of 40 annual reports from Libyan companies’ from 2007 to 2009. In addition, thirty one of the financial managers and information managers express their perceptions about the determinants of CSRD in Libya. The quantitative findings reveal that there is a positive relationship between company age and industry type and the level of CSRD. The qualitative findings show a positive relationship between all factors influencing levels of CSRD used in this study and level of CSRD in Libyan companies.
127 citations
TL;DR: In this paper, the authors investigate usefulness of accounting information system (AIS) for effective organizational performance and show that although AIS is very useful and have effect on organizational performance to listed companies in Dubai financial market (DFM) but, there is no relationship between AIS and performance management.
Abstract: The aim of this study is to investigate usefulness of accounting information system (AIS) for effective organizational performance. AIS is the whole of the related components that are working together to collect, store and disseminate data for the purpose of planning, control, coordination, analysis and decision making. Therefore, impact of AIS on elements of organizational performance such as: performance management and financial performance is examined. The results of this study show that although AIS is very useful and have effect on organizational performance to listed companies in Dubai financial market (DFM) but, there is no relationship between AIS and performance management.
125 citations
TL;DR: In this article, the generalized autoregressive conditional heteroscedastic approach was used to model exchange rate volatility in a panel of nineteen of the Arab countries using daily observations over the period of 1st January 2000 to 19 th November 2011.
Abstract: This paper considers the generalized autoregressive conditional heteroscedastic approach in modelling exchange rate volatility in a panel of nineteen of the Arab countries using daily observations over the period of 1 st January 2000 to 19 th November 2011. The paper applies both symmetric and asymmetric models that capture most common stylized facts about exchange rate returns such as volatility clustering and leverage effect. Based on the GARCH(1,1) model, the results show that for ten out of nineteen currencies the sum of the estimated persistent coefficients exceed one, implying that volatility is an explosive process, in contrast, it is quite persistent for seven currencies, a result which is required to have a mean reverting variance process. Furthermore, the asymmetrical EGARCH (1,1) results provide evidence of leverage effect for majority of currencies, indicating that negative shocks imply a higher next period volatility than positive shocks. Finally, the paper concludes that the exchange rates volatility can be adequately modelled by the class of GARCH models.
93 citations
TL;DR: In this paper, the authors examined the relationship between financial development and economic growth in a small open economy of United Arab Emirates (UAE) using time series data from 1974 to 2008, and employed the autoregressive distributed lag (ARDL) approach to cointegration.
Abstract: This paper empirically examines the relationship between financial development and economic growth in a small open economy of United Arab Emirates (UAE). Using time series data from 1974 to 2008, the study employs the autoregressive distributed lag (ARDL) approach to co-integration. The analysis is carried out using two indicators to measure the level of financial development. The first indicator is the financial depth or size of the financial intermediaries sector as measured by the monetization ratio (M2/GDP). The second indicator is the ratio of the credit provided to private sector by commercial banks as a percentage of the GDP (financial intermediation ratio). The results show a negative and statistically significant relationship between financial development, as measured by M2/GDP, and economic growth. The results also suggest a bi-directional causality between the two variables. Over all, the evidence supports neither the demand-following nor the supply-leading hypotheses for UAE.
92 citations
TL;DR: In this paper, the authors examined the dynamic relationship among carbon dioxide (CO2) emissions, economic growth, energy consumption and foreign trade based on the environmental Kuznets curve hypothesis in Indonesia for the period 1971-2007, using the Auto Regressive Distributed Lag (ARDL) methodology.
Abstract: This study examines the dynamic relationship among carbon dioxide (CO2) emissions, economic growth, energy consumption and foreign trade based on the environmental Kuznets curve (EKC) hypothesis in Indonesia for the period 1971–2007, using the Auto Regressive Distributed Lag (ARDL) methodology. The results do not support the EKC hypothesis, which assumes an inverted U-shaped relationship between income and environmental degradation. The long-run results indicate that foreign trade is the most significant variable in explaining CO2 emissions in Indonesia followed by Energy consumption and economic growth. The stability of the variables in estimated model is also examined. The result suggests that the estimated model is stable over the study period.
89 citations
TL;DR: This article investigated the determinants of capital structure of financial service firms in China using a relative regression of accounting data for 36 A-share financial listed companies over the years 2005-2009.
Abstract: This paper investigates the determinants of capital structure of financial service firms in China Using a relative regression of accounting data for 36 A-share financial listed companies over the years 2005-2009, an empirical study on determinants of capital structure in financial industry is conducted The results show that profitability, firm size, non-debt tax shields, earnings volatility and non-circulating shares are significant influence factors in financial sector Moreover, firm size is positively related to the corporate leverage ratio It is also found that Chinese institutional characteristic affects the capital choice decision While it confirmed that capital structure determinant of financial firms are similar to other industry, the largely state ownerships do affect capital structure choices
85 citations
TL;DR: In this paper, the authors identify determinants of the demand of life insurance in 14 countries in Central and South- Eastern Europe (CSEE) using fixed-effects panel model for the period 1998 - 2010 allowing each cross-sectional unit to have a different intercept term serving as an unobserved random variable that is potentially correlated with the observed regressors.
Abstract: The main purpose of this study is to identify determinants of the demand of life insurance in 14 countries in Central and South- Eastern Europe (CSEE). We use fixed-effects panel model for the period 1998 - 2010 allowing each cross-sectional unit to have a different intercept term serving as an unobserved random variable that is potentially correlated with the observed regressors. We use two measures as a demand for life insurance: life insurance penetration and life insurance density. The research results show that higher, GDP per capita, inflation, health expenditure, level of education and rule of law are the most robust predictors of the use of life insurance. Real interest rates, ratio of quasi-money, young dependency ratio, old dependency ratio control of corruption and government effectiveness do not appear to be robustly associated with life insurance demand.
75 citations
TL;DR: In this article, stock market volatility in two African exchanges, Khartoum Stock Exchange, KSE (from Sudan) and Cairo and Alexandria stock exchange, CASE (from Egypt) is modelled and estimated.
Abstract: Stock market volatility in two African exchanges, Khartoum Stock Exchange, KSE (from Sudan) and Cairo and Alexandria Stock Exchange, CASE (from Egypt) is modelled and estimated. The analysis is based on using daily closing prices on the general indices in the two markets over the period of 2nd January 2006 to 30th November 2010. The paper employs different univariate specifications of the Generalized Autoregressive Conditional Heteroscedastic (GARCH) model, including both symmetric and asymmetric models. The empirical results show that the conditional variance (volatility) is an explosive process for the KSE index returns series, while it is quite persistent for the CASE index returns series. The results also provide evidence on the existence of a positive risk premium in both markets, which supports the hypothesis of a positive correlation between volatility and the expected stock returns. Furthermore, the asymmetric GARCH models find a significant evidence for asymmetry in stock returns in the two markets, confirming the presence of leverage effect in the returns series.
69 citations
TL;DR: In this article, an econometric model was established and parameters were estimated based on the panel data for 11 industrial companies for eight years (2004-2011) and found that the cash conversion cycle, return on assets and operating cash flow are a significant determinant and positively related to the working capital requirements.
Abstract: This study is trying to find the variables that determine working capital for Palestinian industrial firms. We used a sample of 11 industrial firms that are listed on the Palestine Securities Exchange. We used Working Capital as the endogenous variable, and some financial and economic variables, such as cash conversion cycle, operating cash flow, leverage, firm size, return on assets, interest rate on loans, and economic growth rate, as exogenous variables. An econometric model was established and parameters were estimated based on the panel data for 11-industrial companies for eight years (2004-2011). The study found that the cash conversion cycle, return on assets and operating cash flow are a significant determinant and positively related to the working capital requirements, while leverage and firm size are significant but negatively related to the working capital requirements. On the other hand economic variables such as: the interest rate and real GDP growth rate has no significant impact on the working capital. These findings are consistent with several previous studies, for other countries such as Jordan, Brazil, Pakistan, India, Greece, Thailand, Cyprus and Sri Lanka. In addition, it was found that Palestinians firms maintain a sizable working capital which may be due to a long cash conversion cycle (over six months) and to conservative policies due to instable economic and political conditions.
60 citations
TL;DR: In this paper, the impact of global financial crisis on the financial performance of Islamic banking industry in Bahrain has been analyzed and bank specific factors such as LTA, LEQ, and LOHE have been used as predictors for Islamic bank performance in Bahrain.
Abstract: The 2007/2008 global financial crisis has given a significant impact on the performance of banking industry worldwide. The objective of this study is to see the impact of global financial crisis towards the financial performance of Islamic banking industry in Bahrain. Moreover, it also utilizes bank specific factors as predictors for Islamic bank performance in Bahrain. Panel regression is used to analyze the data. The result shows that LTA, LEQ, and LOHE are significant bank specific factors to influence Islamic bank performance in Bahrain. In addition, there is no significant impact of financial crisis upon the financial performance during the crisis period; however, it does affect the financial performance of Bahrain Islamic banking industry after the crisis period.
54 citations
TL;DR: In this paper, the authors conducted an empirical examination into the long-run and short-run equilibrium relationships between macroeconomic variables and the Malaysian stock market index (SMI) for the 1977-2011 period.
Abstract: The current paper conducts an empirical examination into the long-run and short-run equilibrium relationships between macroeconomic variables and the Malaysian stock market index (SMI) for the 1977-2011 period. Specifically, it employs Ng and Perron (NP) bounds statistics test to detect the boundaries of variables stationarity. Subsequently, the co-integrating relationships among variables are tested using the bounds F-statistic test. Eventually, the long-run and short-run equilibrium relationships are analyzed using Pesaran, Shin, and Smith (PSS) bounds tests Approach. The results indicate that all macroeconomic variables are co-integrated with SMI. Besides, understanding the long-run and short-run equilibrium relationships between macroeconomic variables and SMI could be highly appreciable from the perspectives of policymakers, financial economists, domestic and international investors dealing with Malaysian stock market.
TL;DR: In this paper, the effect of working capital management (WCM) on the performance of Jordanian industrial companies is assessed. But, the results suggest that WCM management and performance are positively correlated, which is not consistent with the view of traditional working capital theory.
Abstract: This paper aims to assess the effect of working capital management (WCM) on the performance. Utilizing unbalanced data for a sample of 49 Jordanian Industrial corporations listed at Amman Stock Exchange - 2005 to 2009. Using two alternative measures of profitability as proxy for the performance and five proxies for the Working Capital Management, estimation of twenty models panel data cross-sectional time series have been tested employing two regression models; the Fixed-Effects Model and the Ordinary Least Squares Model. The findings of our study found to be significantly consistent with the view of the traditional working capital theory. The results suggest that working capital management and performance are positively correlated. The regression results also concluded that the Jordanian industrial firms follow a conservative investing policy and less aggressive financing policy in the working capital, and a well-efficient managing of the working capital can add value to the shareholders wealth.
TL;DR: In this paper, the authors measured the financial performance of Jordanian Arab commercial bank for the period 2000-2009 by using the DuPont system of financial analysis which is based on analysis of return on equity model.
Abstract: This study attempts basically to measure the financial performance of the Jordanian Arab commercial bank for the period 2000-2009 by using the DuPont system of financial analysis which is based on analysis of return on equity model. The return on equity model disaggregates performance into three components: net profit margin, total asset turnover, and the equity multiplier. Arab bank is one of the largest financial institutions in the Middle East and is ranked amongst the largest international financial institutions. The bank witnessed a continuation of challenges brought on by the global financial crisis. It was found that the financial performance of Arab Bank is relatively steady and reflects minimal volatility in the return on equity. Net profit margin and total asset turnover exhibit relative stability for the period from 2001 to 2009.The equity multiplier also show almost stable indicators for the period from2001-2005 and the ratios declined from 2006-2009 which indicates that the Arab bank had less financial leverage in the recent years, which means the bank is relying less on debt to finance its assets.
TL;DR: In this paper, the authors investigated the relationship between economic growth, exports and external debt of Lebanon through an econometric analysis over the period 1970-2010 with the inclusion of a fourth macroeconomic variable that is the exchange rate.
Abstract: The econometric relationship between external public debt, exports and economic growth in Lebanon has been rarely examined. This study empirically investigates the relationship between economic growth, exports and external debt of Lebanon through an econometric analysis over the period 1970-2010 with the inclusion of a fourth macroeconomic variable that is the exchange rate. The exports were introduced in the model to test the export-led growth hypothesis for Lebanon. We explore this relationship using the vector error correction models (VECM) and we employ Granger causality technique in order to investigate the presence of causality among these variables. The results show that both short run and long run relationships exist among these variables. Moreover, the finding suggests, i) bidirectional Granger causality between GDP and external debt servicing, ii) unidirectional Granger causality that runs from external debt to exports, iii) unidirectional causality running from exports to economic growth, and iv) unidirectional causality running from exchange rate to economic growth.
TL;DR: In this paper, the authors investigated the impact of access to bank credit on the economic performance of key economic sectors using sectoral panel data for Kenya and found a positive and significant impact of credit on sectoral gross domestic product measured as real value added.
Abstract: Despite the growing literature on financial development-economic growth nexus, there is paucity of empirical studies that explore the impact of access to credit and economic performance at the sectoral country level, as an increasing number of studies largely focus on cross-country analyses. This paper investigates the impact of access to bank credit on the economic performance of key economic sectors using sectoral panel data for Kenya. We find a positive and significant impact of credit on sectoral gross domestic product measured as real value added. However, the magnitude of the impact is smaller once factors such as the labour employed and past economic performance of the sectors are taken into account. Policies aimed at financial sector deepening and increasing access to credit are of essence to enhancing economic performance. Such policies should, however, be complemented with strategies that enhance efficiency of the key sectors of economy.
TL;DR: In this article, the authors examined the impact of earnings and book value in the formulation of stock prices on a sample of 38 companies listed in the Athens Stock Market during the 1996-2008 period.
Abstract: Past empirical research indicates that, in an increasing number of countries, certain accounting parameters affect the course of stock prices. Moreover, that this effect becomes stronger with time. The present study examines the impact of earnings and book value in the formulation of stock prices on a sample of 38 companies listed in the Athens Stock Market during the 1996-2008 period. The resulting evidence suggests that the joint explanatory power of the above parameters in the formation of στοck prices increases over time. However, the impact of earnings is diminishing, compared to the book value, while investors strive towards analysing the fundamental parameters of businesses. Finally, multicollinearity was traced between the earnings and book value variables.
TL;DR: In this article, the authors investigated the impact of ownership structure on dividend policies of listed companies in the Shanghai Stock Exchange over the period 2007-2011 and found that firms with higher ownership by the largest shareholders, ownership concentration, and government ownership are more likely to pay dividends.
Abstract: This study investigates the impact of ownership structure on dividend policies of listed companies in the Shanghai Stock Exchange over the period 2007–2011. The results show that firms with higher ownership by the largest shareholder, ownership concentration, and government ownership are more likely to pay dividends. However, the probability of paying dividends decreases when institutions hold more shares. It is also found that the magnitude of dividend payouts has a positive relationship with the ownership by the largest shareholder, ownership concentration, and government ownership but a negative relationship with the ownership by institutions and foreign investors.
TL;DR: In this article, the impact of small-scale agricultural entrepreneurship on livelihood assets rural poor women and role of NGOs to developed women living of standard was discussed, where the authors used the sustainable livelihood analysis framework as an analytical tool to identify ways to advance the livelihood of small entrepreneurship.
Abstract: The present study deals with the impact of small scale agricultural entrepreneurship on livelihood assets rural poor women and role of NGOs to developed women living of standard. The sample of the study consisted 300 women entrepreneurs those are involvement with livestock and poultry, fisheries, and vegetables entrepreneurship. Stratified Random sampling technique was used to obtained sample size. The study used the sustainable livelihood analysis framework as an analytical tool to identify ways to advance the livelihood of small entrepreneurship. Tobit and ordered probit regression estimation were used to analyze the result. Livestock and poultry entrepreneurship is significant and positively associated with financial capital, physical and social capital, vegetables entrepreneurship is significant and positively associated with natural capital and physical capital, fisheries entrepreneurship also positive and significantly associated with human capital. Role of NGOs micro credit and institutional support has great impact on women entrepreneurs living of standard. The analysis shows how entrepreneurs can achieve sustainable livelihood through access to a range of livelihood assets. Livestock and poultry entrepreneurs potentially provide higher economic returns, physical and social benefits. However, lack of resources, vulnerability and poor institutional support are identified as constraints to long term sustainability.
TL;DR: In this paper, the authors investigated the probable relationship between debt policies (including current debt, non-current debt, and total debt) and performance of Tehran Stock Exchange Companies and applied a regression model to investigate the relationship between the performance indicators and debt ratios.
Abstract: The ability of companies in determining suitable financial policies to make investment opportunities is one of the most principal factors for the companies’ growth and progression. Adopting a debt policy or a capital structure is considered as a momentous decision that influences the companies’ value. This paper is aimed to investigate the probable relationship between debt policies (including Current Debt, Non-Current Debt, and Total Debt) and performance of Tehran Stock Exchange Companies. The regression model is applied to investigate the relationship between the performance indicators and debt ratios. In this research, financial performance indicators are considered as Gross Margin Profit, Return on Assets (ROA), Tobin's Q Ratio, and Debt Ratios (Current Debt, Non-Current Debt, and Total Debt). “size” and “growth rate” are considered as control variables. Results show that an increase in current debts, non-current debts, and total debts has a negative influence on the corporate performance. It was also found that companies that merely attempt to create assets through debts, without any attention to the company size and other important factors, are not able to have an excellent performance.
TL;DR: In this article, the authors examined the possible association between ownership structure and Jordanian industrial public shareholding companies' dividend payout policy and found that there is a positive and significant relation between foreign ownership structure, company size and debt ratio and dividends policy measured by return on assets (ROA).
Abstract: This research examines the possible association between ownership structure and Jordanian industrial public shareholding companies’ dividend payout policy. The present study examines the payout behavior of dividends for Jordanian industrial public shareholding companies over the period 2005-2007. The results consistently support that there is positive and significant relation between foreign ownership structure and the dividends payout policy through Tobin’s Q. However, the results document significant relationship between foreign ownership structure, company size and debt ratio and dividends policy measured by return on assets (ROA).
TL;DR: In this article, the authors employ the random effects regression model and find that both economic freedom and growth rate in each state are significant positive determinants of FDI inflows, while per capita income and unemployment rate exhibit significant negative relations with FDI.
Abstract: Researchers have identified economic freedom, growth rate of the economy, per capita income, unemployment rate, etc as determinants of foreign direct investment (FDI) inflows into the United States as a country. Whether or not these economic variables also determine FDI at the states’ level is often excluded from the literature. This paper attempts to fill that gap by using a panel data from 1984 through 2007 for all 50 states. We employ the random effects regression model and find that both economic freedom and growth rate in each state are significant positive determinants of FDI inflows. This result is consistent with that of Ray (1989) who shows that high economic growth in the U. S. leads to more FDI inflows. Bengoa and Sanchez-Robles (2003), and Kapuria-Foreman (2007) document similar results for Latin American countries. In addition, we show that both per capita income and unemployment rate exhibit significant negative relations with FDI. These results are consistent with that of Edwards (1992) and Jaspersen, Aylward, and Knox (2000), but inconsistent with that of Tsai (1994) and Lipsey (1999). We attribute the negative relation between FDI and per capita income to the fact that states with higher per capita income tend to discourage FDI inflows since higher per capita income translates into higher wages. The observed inverse relation between FDI and unemployment rate is due to the fact that states with high unemployment rates are more prone to crime, and therefore deters risk-averse foreign investors from assuming a lasting interest in those states.
TL;DR: In this article, the effects of five well-documented behavioral biases, namely, disposition effect, herd behavior, availability heuristic, gambler's fallacy and hot hand fallacy, on the mechanism of stock market decision-making, and individual differences in the degrees of these effects.
Abstract: Contemporary research documents various psychological aspects of economic and financial thought and decision-making. The main goal of our study is to analyze the effects of five well-documented behavioral biases, namely, disposition effect, herd behavior, availability heuristic, gambler's fallacy and hot hand fallacy, on the mechanism of stock market decision-making, and, in particular, the individual differences in the degrees of these effects. Employing an extensive online survey, we document that on average, active stock market investors exhibit moderate degrees of behavioral biases. Furthermore, we find that, on the one hand, more experienced investors are less affected by behavioral patterns, yet, on the other hand, professional portfolio managers do not behave, in this respect, differently (more rationally) from non-professional investors. We, therefore, infer that investor's experience in stock market matters, but not the "status" itself of being a professional, may decrease the effect of behavioral biases on her. In addition, we detect that the major "rationalizing" effect of experience is already accumulated in the first years of investors' stock market activity. Finally, we document that female investors are more strongly affected by all the five behavioral biases.
TL;DR: In this paper, the role of human capital in terms of education and health on economic growth of Pakistan during 1974-2009 was investigated using ADF, PP and Ng-Perron tests to check the stochastic properties of the variables.
Abstract: This study is an attempt to investigate the role of human capital in terms of education and health on economic growth of Pakistan during 1974-2009. Using annual data, ADF, PP and Ng-Perron tests are utilized to check the stochastic properties of the variables. Long-run relationship among variables is confirmed through Johansen and Juselius cointegration test whereas the long-run and short-run dynamics are observed by VECM specification. For causality purpose both VECM based causality and Toda-Yamamoto causality tests are employed. Stability of the model is confirmed through CUSUM and CUSUMSQ. The results indicate strong positive impact of human capital on economic growth despite the fact that Pakistan has been spending less percentage of GDP on education and health facilities to create human capital. The study concludes that in order to reap maximum benefits from human capital there is a need to formulate and implement effective economic policies related to the provision of education and health facilities to the people.
TL;DR: In this article, the authors empirically examined correlation and volatility transmission across international stock markets by employing Bivariate GARCH model and found that long run co-integration is found across International stock indices prices.
Abstract: The study empirically examines correlation and volatility transmission across international stock markets by employing Bivariate GARCH model. The study uses weekly data for five major stock indices such as S&P 500(USA), BSE 30 sensex (India), FTSE 100(U.K), Nikkei 225(Japan) and Ordinary Share Price Index (Australia) from 30 th January, 1998 to 30 th July, 2011. Long run and short run integrations are investigated through Johansen cointegration and vector error correction models respectively. The results of Johansen test show that long run co-integration is found across international stock indices prices. Further, results suggest that the arrival of external news is simultaneously received by US and Japan stock markets and then transmitted to other Asian and European stock markets. The results of bivariate GARCH model reveal that there is a bidirectional volatility spillover between US and Indian stock markets. This is due to fact that these two economies are strongly integrated through international trade and investment. Finally, results show that a unidirectional volatility spillover from Japan and United Kingdom to India.
TL;DR: In this paper, the effect of board size on the performance of banks in a developing economy like Nigeria has been investigated and a negative relationship between board size and bank financial performance with a t-value of -1.977 and a p- value of 0.053.
Abstract: A critical review of the Nigerian banking system over the years shows that one of the problems confronting the sector has been that of poor corporate governance. In an attempt to investigate the linkage between corporate governance and financial performance of banks, this study contributed to the existing literature by assessing the effect of size of boards on the performance of banking sector in a developing economy like Nigeria. This study made use of a range of data drawn from the Nigerian Stock Exchange fact book (2008), which contains information on board size and the performance proxies. Regressing performance on board size, it was observed that banks with board size below 13 are more viable than those with board size above 13. The study further observed that banks with larger boards recorded profits lower than those with smaller boards. Therefore, this study concludes that there is a significant negative relationship between board size and bank financial performance with a t- value of -1.977 and a p- value of 0.053. This is because, increase in board size occurs with increase in agency problems (such as director free-riding) within the board and the board becomes less effective. However, the paper recommends a smaller board size for better financial performance and to reduce the problem of free-rider of banks in Nigeria.
TL;DR: In this paper, the authors investigate the differences in the degree of pass-through from monetary policy rate into deposit and lending rates across countries and between the pre- and post-crisis of 1997.
Abstract: This study seeks to examine the effectiveness of interest rates transmission mechanism from money market rate into retail banking rate in several Asian countries. In particular, we intend to investigate the differences in the degree of pass-through from monetary policy rate into deposit and lending rates across countries and between the pre- and post-crisis of 1997. The study is carried out by running the Seemingly Unrelated Regression (SUR) equations. The results suggest that the transmission rate from money market rate into deposit and lending rates is slow and sluggish across economies. There is no much difference between the pass-through rate into deposit and lending rates but the pass-through into deposit rate is slightly higher than that in lending rate. Most of the countries have slower adjustment rates after the crisis 1997, indicating low effectiveness of monetary policy, imperfect financial market and lower degree of financial integration if these economies. However, there is an exception for Malaysia.
TL;DR: In this paper, the authors analyzed demand for different monetary aggregates (M0, M1, M2 and M3) in Kenya for the period 1997:4-2011:2.
Abstract: The paper analyses demand for different monetary aggregates (M0, M1, M2 and M3) in Kenya for the period 1997:4-2011:2. Dynamic frameworks are used to estimate and uncover parsimonious and empirically stable demand for money functions. Price, real GDP, nominal 91-Day Treasury bill rate, nominal interbank rate, nominal deposit rate and foreign interest rate affected the long-run demand for money functions to different degrees. The demand for money functions is found to be unstable over the period for the parameter values, implying that the current monetary targeting policy framework is inappropriate. However, there are challenges in adopting an alternative monetary policy framework.
TL;DR: In this paper, the authors conducted a study to get the perspectives of the postgraduate students on shari'ah audit in a country relatively new to Islamic finance industry and found that they have a low level of awareness and understanding of the term and concept of shari’ah audit.
Abstract: Islamic finance industry is claimed to be one of the fastest growing industry and allegedly immune to any financial turmoil. With a growth of between 15 to 20% for the past decades, it surely provides an interesting avenue for research. One aspect that is still under-researched is the shari’ah audit. In the absence of a proper framework and standards, this could dampen the future of the Islamic finance industry. There is an impending need for the Islamic financial institutions to provide reasonable and sufficient assurance that they have really followed the shari’ah through shari’ah audit. The absence of proper shari’ah audit framework is worrying. This study is embarked to get the perspectives of the postgraduate students on shari’ah audit in a country relatively new to Islamic finance industry. Postgraduate students from two universities are chosen as samples. Survey questionnaires are distributed by hand and the results are presented using frequency tables. It is found that they have a low level of awareness and understanding of the term and concept of shari’ah audit. They are also in vague as to whether the shari’ah audit is the same as conventional audit. Moreover, they feel that the Islamic financial institutions are not doing enough to promote shari’ah audit. They agree that the mass media has a big role to play in promoting shari’ah audit. Finally, they agree that the shari’ah audit has a very good potential to be developed in the future.
TL;DR: In this paper, the authors investigated the influencing factors of women micro-entrepreneurship development in rural Bangladesh and found that personal attributes, freedom of work and desire for higher social status significantly influenced women to participate in micro entrepreneurship.
Abstract: The paper investigates the influencing factors of women micro-entrepreneurship development in rural Bangladesh. The analysis based on empirical investigation carried out in northern part of Bangladesh. Data were collected from 248 women micro-entrepreneurs and 132 non-entrepreneurs. Present study adopts three basic aspects such as personal attributes, family affairs and external environment to evaluate their contribution towards women entrepreneurship. Applying “probit” model, the study finds among various personal attributes, freedom of work and desire for higher social status significantly influenced to participate in micro-entrepreneurship. Family hardship also turns likely to be involved in micro-entrepreneurship. Among various external factors, access to credit, access to entrepreneurship training, membership with development organizations, access to information and favorable infrastructure depicts inspiring factors in participating micro-entrepreneurship. Study also indentifies several challenging factors toward smooth development of women micro-entrepreneurship. The paper provides suggestions for strengthening women entrepreneurship development process in rural Bangladesh.
TL;DR: This paper investigated the role of financial development (as measured by the credits to the private sector to GDP) in enhancing growth for different groups of countries over a period of 70 countries over the period 1970-2009 using both LS (fixed effect) and GMM-Difference estimators for dynamic panel data.
Abstract: The relationship between financial development and economic growth has received a lot of attention in the economic literature in recent years. This study aims to revisit different econometric approaches used in panel data in relation of financial sector development and growth. In what follows, we extend our previous study by employing updated data and also exploring more questions related to the empirical link between financial development and growth. More specifically, we will investigate the issues relevant to static and dynamic panel data effect. We investigate the role of financial development (as measured by the credits to the private sector to GDP) in enhancing growth for different groups of countries. Estimations are conducted with a panel data of 70 countries over the period 1970-2009 using both LS (fixed effect) and GMM-Difference and GMM-System estimators for dynamic panel data. While the finding of a positive correlation between indicators of financial development and economic growth cannot settle this debate, advances in computational capacity and availability of large cross-country data sets with relatively large time dimensions have enabled researchers to rigorously explore the relationship between financial development and economic growth. Empirical results reinforce the idea that financial development promotes economic growth in all econometric approaches used in this paper.